Ethereum Struggles to Regain Momentum Amid Market Uncertainty

Ethereum’s recent pullback has raised doubts about its short-term strength, with ETH dropping 11% this week.

The decline came alongside a 4% fall in the Nasdaq, as weak corporate earnings and fears of overvalued AI stocks fueled a wider market correction. Ongoing worries over the U.S. government shutdown have further dampened investor sentiment.

Futures data shows limited optimism. According to Laevitas, Ethereum’s monthly futures premium remains near 4%, below the typical 5–10% range – suggesting weak appetite for leveraged bullish bets.

At the same time, Ethereum’s fundamentals have softened. The total value locked (TVL) in DeFi protocols has dropped 24% in 30 days to $74 billion, following a $120 million exploit on Balancer v2. DApp revenues fell 18% in October to $80.7 million, indicating reduced network activity and lower staking yields.

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Meanwhile, U.S.-listed Ethereum spot ETFs recorded $507 million in outflows this month, highlighting declining institutional demand. This lack of inflows has weighed on sentiment, even as onchain metrics show slight improvement – active addresses rose 5%, and transactions increased 2% over the past week.

The next potential catalyst for ETH is the Fusaka upgrade, expected in early December, which aims to improve scalability and security. However, with risk appetite fading, derivatives markets softening, and institutional flows turning negative, analysts say Ethereum faces an uphill battle to reclaim the $3,900 level in the near term.